Tense political climate jeopardizes CATL and Ford's EV battery plant - PingWest

Tense political climate jeopardizes CATL and Ford's EV battery plantCATL

Tense political climate jeopardizes CATL and Ford's EV battery plant

Rebbeca Ren

posted on 21 hours ago

New concerns over the plant have popped out from both the US and Chinese sides.

Although Ford officially announced the plant with China's EV battery maker CATL last Monday, new resistances have since popped out from both the US and Chinese sides. 

While Ford sees the facility, which would cost $3.5 billion and be located in Michigan, as a critical part of its efforts to gain more competitiveness in the EV market, the political "tug-of-war" could slow things down.

Shortly after the US automaker's announcement, US Senator Marco Rubio asked the Biden administration to review the CATL-Ford deal, citing concerns it would deepen US reliance on China for battery technology.

In response to media questions about US politicians' criticism of the CATL-Ford deal, Wang Wenbin, a spokesperson for the Chinese Foreign Ministry, said that normal economic and trade cooperation between Chinese and US enterprises should not be politicized.

"We urge certain individuals in the US to abandon ideological bias, stop overstretching the concept of national security or suppressing foreign companies, and create an open, fair, just, and non-discriminatory environment for Chinese companies to invest and operate in the US," the spokesperson said during the briefing on last Tuesday.

In fact, in order to get the plant in place and receive subsidies from the US government, CATL does not own any stakes in it and only provides battery technology and services; instead, Ford owns 100% of the facility.

Despite this, some American politicians are still not at ease. Virginia Governor Glenn Youngkin went so far as to call Ford and CATL's planned new plant a Chinese "Trojan horse" that would undermine policy efforts to strengthen the US auto industry.

Ford pushed back against the Governor's characterization, saying the company would solely own and operate the plant and that the project "is good for the country, the planet and Ford's business. "We’re creating 2,500 new US jobs, while helping to strengthen domestic manufacturing and supply chains and reduce carbon emissions,” Ford spokeswoman Melissa Miller said.

The partnership has also raised concerns among Chinese authorities, as CATL is the world's largest EV maker battery maker which owns some of the most lucrative technology in LFP battery manufacturing.

Bloomberg reported last Thursday, citing sources familiar with the matter, that China will scrutinize the deal to ensure CATL's core technology is not shared with the US automaker.

These concerns stem from a broader shift in China-US relations in recent years, with rising tensions on issues ranging from trade to technology. And this political climate has created obstacles for companies on both sides to work together.

Overall, CATL has been rapidly expanding its overseas operations as demand for electric vehicles and energy storage systems continues to grow. Earlier, in December, it announced that its first overseas plant in Thuringia, Germany, was on track for mass production of lithium-ion battery cells, and in September it signed a real estate deal with the city of Debrecen, Hungary, marking the official launch of its second European plant.

CATL ranks first in the world by installed battery capacity in 2022, according to South Korean firm SNE Research. The Ningde-based company has held the top spot on the global market for EV batteries for six consecutive years and shows no signs of slowing down based on 2022 projections, said the report.